Ascott Residence Trust issues $200 mil sustainability-linked bond
In an April 20 news release, ART claims the bargain was oversubscribed by 2.2 times on the back of solid need, leading to the bond difficulty being upsized from $150 million to $200 million. The final orderbook shut at $335 million with orders from throughout 47 accounts. In terms of capitalist allowance, 79% of the bond issuance headed to institutional investors, while private financial investors accounted for 21%.
Ascott Residence Trust (ART) has recently provided a $200 million sustainability-linked bond, making it the initial Singapore-listed real estate trust as well as the first hospitality trust internationally to provide such a bond.
According to ART, the issuance of the sustainability-linked bond has netted the trust a green premium, or “greemium”, which refers to the lower expense of funding from releasing financial obligation that has a favorable ecological influence as compared to typical bonds. ART has even dedicated to a sustainability efficiency target of greening 50% of its complete profile by 2025. To achieve this, the homes need to acquire a regionally, nationally or internationally acknowledged eco-friendly building requirement or qualification by a recognised third-party.
Proceeds from the bond issuance are going to be spent to re-finance ART’s existing loanings. DBS Bank is the single sustainable money consultant, lead manager and bookrunner for the transaction.
Last year, ART acquired the first hospitality trust environment-friendly funding in Singapore, which was utilized to finance its first advancement project – lyf one-north, a co-living residential property accredited with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
” Sustainability is fundamental to everything we do at ART. Aligning our funding requires with our sustainability initiatives to build a greener profile shows ART’s emphasize liable development,” says Beh Siew Kim, Chief Executive Officer of ART. “Since 31 Dec 2021, 33% of ART’s portfolio is green-certified and we aim at to eco-friendly the rest of our portfolio by 2030.”
The bond was released under ART’s $2 billion Multicurrency Debt Issuance Programme under its newly-established Sustainability-Linked Finance Framework. The five-year bond is going to mature in April 2027 and carry a dealt with coupon price of 3.63% per year, paid semi-annually behind.